Impacts of Bhuj Earthquake on Revenue, Expenditure, Economy and Environment

Impacts of Bhuj Earthquake on Revenue, Expenditure, Economy and Environment

Bhuj Earthquake and Impact on Revenue

About Bhuj Earthquake Read Here

Impact on Revenue

Sales tax losses for February and March 2001 were Rs 115 crore. For 2001-02, the losses were expected to be Rs 260 crore.

Only 10% of the estimated stamp duty and registration fees were expected to be realised in February and March 2001, . For 2001-02, collections were expected to fall by 50%.

Motor vehicle tax collections were expected to fall short of budgeted figures by almost Rs 600 crore.

Monthly losses of Rs 4 crore each were projected for electricity duty and entertainment tax.

Professional taxes were expected to be lower by Rs 5 crore in the current year.

The impact on total tax revenues was estimated at Rs 286 crore, Rs 345 crore, and Rs 436 crore, in 2000-01, 2001-02, and 2002-03 respectively.

Total own taxes (as % of SDP) were expected to fall from budgeted estimate of 8.56% (2000-01) to 7.85% and further to 7.46% in 2001-02.

Total tax revenue (as% of SDP) was expected to decline from budgeted estimate of nearly 10% (2000-01) to 9.27% and further to 8.76% in 2001-02.

Total relief expenditure (food supplies, medical relief, debris removal, and cash compensation) was estimated at around Rs 840 crore.

Total rehabilitation expenses were figured at Rs 8665 crore. Housing accounted for the highest expenditure (Rs 5148 crore), followed by education (Rs 837 crore) and drinking water (Rs 614 crore).

Total (relief and rehabilitation) expenses amounted to Rs 9,345 crore.

Other Economic Impacts

Non-tax revenues : Interest receipts, irrigation receipts, and royalties were expected to remain largely unaffected.

Municipal finances: Almost 10% of municipal revenues were expected to be lost in a year.

Banking : 68 commercial bank branches were fully damaged and 80 branches were partially damaged.

Financial market: The wealth loss was expected to lead to reshuffling of peoples’ portfolios and affect asset market behaviour.

Employment: Nearly 5 lakh people were expected to become unemployed. Employment in salt, ceramic, and small-scale industries (including refractories, powerlooms, cotton ginning etc.) was worst affected.

Environmental Impacts

80% of water and food sources were destroyed.

Over a million structures were damaged, as a result local resources were used on a very high scale in order to repair and rebuild the region.

The area was once India’s most visited region (by tourists) outside the central cities. However after many of the old, historic buildings were destroyed this element of the economy was destroyed. As a result the money no longer exists to maintain the environment to the same standard.


This was the major cause of the percentage of crops which were destroyed. Groundwater was brought to the surface by the frequency of the quake…the groundwater then flowed away in the Indian ocean, as such even months and years later the water table in the region has a reduced quantity and crop yields are still less plentiful then pre-quake years. The purple spots represent this water.

Disaster loss, reconstruction cost and output loss

ADB and World Bank’s Gujarat Earthquake Assessment Mission visited Gujarat during February 11-22, 2001 for assessing the economic impact of the earthquake.

Bhuj Earthquake
Bhuj Earthquake

The disaster loss was estimated at Rs 99 billion.

Reconstruction costs were estimated at Rs 106 billion.

The annual loss of state domestic product was estimated at around Rs 20 billion (assuming an ICOR of 4) for the first 12 months.

Transportation System:

  • Airports closed
  • City in gridlock as traffic lights were out
  • Cars were used to transport injured due to run out of ambulances

Telecommunication System:

Telecommunication system was disrupted initially

People were requested  to use messaging service instead of calling, so that emergency  services  can use the phone lines.

Telephone companies established emergency lines and free call facilities after few hours.

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